Bitcoin Drops to $102,000 on Tariff Fears; Kalshi Secures $300M, Major Banks Explore G7 Stablecoins
Executive Summary
The cryptocurrency market experienced significant volatility following announcements of new tariffs, which contributed to Bitcoin's price falling to $102,000 and widespread liquidations across the broader digital asset space. Concurrently, the Web3 ecosystem saw substantial institutional developments, including prediction market platform Kalshi securing a $300 million funding round for global expansion and a coalition of major global banks initiating exploration into G7 currency-backed stablecoins.
The Event in Detail
Bitcoin Price Action and Market Liquidations
Bitcoin's price declined to $102,000 following an announcement by Donald Trump regarding the imposition of 100% tariffs on Chinese imports. This macroeconomic event triggered substantial liquidations across the crypto market. Over $2.19 billion in Bitcoin (BTC) long positions were liquidated within 24 hours, contributing to a total of $8.02 billion in long liquidations across the broader cryptocurrency market, according to CoinGlass data. Ray Salmond, head of markets at Cointelegraph, highlighted the severity of cascading liquidations, noting a price dislocation between crypto exchange Coinbase, where BTCUSD fell to $107,000, and Binance perpetual futures, where BTCUSDT crashed to $102,000. Cory Klippsten, CEO of Swan Bitcoin, indicated that if a broader "risk-off mood" persists, Bitcoin could continue to be affected before stabilizing.
Kalshi's Strategic Funding and Expansion
Prediction marketplace Kalshi completed a Series D funding round, securing $300 million and reaching a valuation of $5 billion. The round was led by Sequoia Capital and Andreessen Horowitz (a16z), with additional participation from investors including CapitalG, Coinbase Ventures, General Catalyst, and Spark Capital. This capital injection is intended to facilitate Kalshi's immediate expansion into over 140 countries. Kalshi, which is regulated by the Commodity Futures Trading Commission (CFTC), has already surpassed competitor Polymarket in trading volume, recording over $956 million in volume during the week of September 29, nearly double that of its rival. Alex Immerman, a partner on a16z's Growth Fund, praised Kalshi's founders for pursuing the "difficult but more responsible route" of regulatory compliance. John Wang, Kalshi's crypto lead, emphasized the "essential" role of crypto as a global financial layer in building new financial primitives for trading on the platform. The platform currently accepts crypto deposits through a partnership with ZeroHash and has integrated with trading apps like Robinhood and Webull.
Major Banks Explore G7-Backed Digital Currencies
A consortium of major global financial institutions, including Banco Santander, Bank of America, Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, MUFG Bank Ltd, TD Bank Group, and UBS, is exploring the issuance of 1:1 reserve-backed digital money. These digital currencies would be linked to G7 currencies and operate on public blockchains. The initiative aims to enhance market competition and ensure full compliance with regulatory requirements, positioning these digital assets as a compliant alternative to existing crypto-native stablecoins. The project aligns with the GENIUS Act, signed in July 2025, which mandates 1:1 reserve backing for stablecoins and prohibits interest-bearing tokens. The current global stablecoin market is estimated at approximately $290 billion, primarily led by Circle's USDC and Tether's USDT.
Market Implications
The observed volatility in Bitcoin prices underscores the sensitivity of the cryptocurrency market to global macroeconomic policy shifts. The substantial liquidations highlight how geopolitical events can rapidly impact digital asset valuations and investor positions. Kalshi's successful $300 million Series D funding round and its subsequent global expansion signify growing investor confidence in regulated Web3 platforms. This development points to an increasing demand for compliant prediction markets, particularly as traditional financial participants seek regulated avenues within the digital asset space. The collective effort by major global banks to explore G7-backed digital currencies represents a significant potential shift in the stablecoin market. This initiative could introduce highly regulated, institutionally managed alternatives to current crypto-native stablecoins, potentially increasing institutional adoption of digital assets while intensifying competition within the stablecoin ecosystem. The adherence to frameworks like the GENIUS Act suggests a future where digital money is more deeply integrated into and governed by traditional financial regulatory structures.
Expert Commentary
Cory Klippsten, CEO of Swan Bitcoin, commented on Bitcoin's price action, stating, "If the broader risk-off mood holds, Bitcoin can get dragged around a bit before it finds support and starts to decouple again." Regarding Kalshi's strategy, Alex Immerman, a partner on a16z's Growth Fund, lauded the founders for choosing "the difficult but more responsible route" of seeking Commodity Futures Futures Trading Commission (CFTC) regulation. John Wang, Kalshi's crypto lead, articulated the platform's future vision, emphasizing that crypto, acting as a global financial layer, is "essential to fulfilling that vision" of developing new financial primitives for trading on Kalshi.
Broader Context
The recent market movements illustrate the increasing interconnectedness between traditional macroeconomic policy decisions and the cryptocurrency market. Tariff announcements and subsequent market reactions demonstrate that digital assets are not immune to global economic sentiment and can experience significant price fluctuations in response. The simultaneous advancements by Kalshi, a regulated prediction market platform securing substantial funding and expanding globally, and the collaborative efforts of major banks to develop G7-backed digital currencies, highlight a significant trend of convergence between traditional finance and Web3 technologies. This trend suggests a future where digital assets are increasingly integrated into, and influenced by, established financial systems and regulatory frameworks, emphasizing compliance as a key driver for institutional and mainstream adoption. The focus on robust regulatory frameworks, exemplified by the GENIUS Act and Kalshi's CFTC oversight, indicates a maturing digital asset landscape where structured and compliant innovation is attracting significant capital and shaping market evolution.
Edgen Crypto·Oct 11 2025, 03:28
